Crestwood Local School District Basic Financial Statements For Fiscal by hmn57734

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									Crestwood Local School District
     Basic Financial Statements
 For Fiscal Year Ended June 30, 2006
Board of Education
Crestwood Local School District
4565 West Prospect St.
Mantua, Ohio 44255


We have reviewed the Independent Auditor’s Report of the Crestwood Local School District,
Portage County, prepared by Rea & Associates, Inc., for the audit period July 1, 2005 through
June 30, 2006. Based upon this review, we have accepted these reports in lieu of the audit
required by Section 117.11, Revised Code. The Auditor of State did not audit the accompanying
financial statements and, accordingly, we are unable to express, and do not express an opinion on
them.

Our review was made in reference to the applicable sections of legislative criteria, as reflected by
the Ohio Constitution, and the Revised Code, policies, procedures and guidelines of the Auditor of
State, regulations and grant requirements. The Crestwood Local School District is responsible for
compliance with these laws and regulations.




Mary Taylor, CPA
Auditor of State

April 23, 2007




                          88 E. Broad St. / Fifth Floor / Columbus, OH 43215 3506
                   Telephone: (614) 466 4514         (800) 282 0370   Fax: (614) 466 4490
                                          www.auditor.state.oh.us
This Page is Intentionally Left Blank.
                                            Crestwood Local School District
                                               Basic Financial Statements
                                            Fiscal Year Ended June 30, 2006

                                                    TABLE OF CONTENTS

                                                                                                                                      Page


Independent Auditor s Report ..........................................................................................................1

Management s Discussion and Analysis ..........................................................................................3

Statement of Net Assets..................................................................................................................12

Statement of Activities ...................................................................................................................13

Balance Sheet - Governmental Funds ............................................................................................14

Reconciliation of Total Governmental Fund Balances to
 Net Assets of Governmental Activities .......................................................................................15

Statement of Revenues, Expenditures and Changes in
  Fund Balances Governmental Funds........................................................................................16

Reconciliation of the Statement of Revenues, Expenditures and
 Changes in Fund Balances of Governmental Funds to the
 Statement of Activities ................................................................................................................17

Statement of Revenues, Expenditures and Changes in Fund
  Balance Budget (Non-GAAP Basis) and Actual General Fund ...........................................18

Statement of Fiduciary Net Assets -
  Fiduciary Funds..........................................................................................................................19

Statement of Changes in Fiduciary Net Assets - Private
  Purpose Trust Fund ....................................................................................................................20

Notes to the Basic Financial Statements.........................................................................................21




                                                                     i
                                                                                            January 26, 2007

The Board of Education
Crestwood Local School District
4565 West Prospect Street
Mantua, Ohio 44255

                                INDEPENDENT AUDITOR'S REPORT

We have audited the accompanying financial statements of the governmental activities, each major fund,
and the aggregate remaining fund information of Crestwood Local School District (the School District), as
of and for the year ended June 30, 2006, which collectively comprise the School District's basic financial
statements as listed in the table of contents. These financial statements are the responsibility of the School
District's management. Our responsibility is to express opinions on these financial statements based on our
audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinions.

In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, each major fund, and the aggregate remaining
fund information of the School District, as of June 30, 2006, and the respective changes in financial
position, where applicable, and the respective budgetary comparison for the general fund for the year then
ended in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated January 26,
2007 on our consideration of the School District's internal control over financial reporting and our tests of
its compliance with certain provisions of laws, regulations, contracts and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on the internal
control over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be considered in assessing the results of our
audit.




                                                      1
Crestwood Local School District
Independent Auditor’s Report
Page 2


The Management’s Discussion and Analysis on pages 3 through 11 are not a required part of the basic
financial statements but is supplementary information required by the Governmental Accounting Standards
Board. We have applied certain limited procedures, which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required supplementary
information. However, we did not audit the information and express no opinion on it.




                                                  2
                            Crestwood Local School District
                          Management s Discussion and Analysis
                          For the Fiscal Year Ended June 30, 2006
                                         Unaudited
_____________________________________________________________________________________

This discussion and analysis of Crestwood Local School District s financial performance provides an
overall review of the School District s financial activities for the fiscal year ended June 30, 2006. The
intent of this discussion and analysis is to look at the School District s financial performance as a whole;
readers should also review the basic financial statements and the accompanying notes to enhance their
understanding of the School District s financial performance.

Financial Highlights

Key financial highlights for 2006 are as follows:

        Net assets of governmental activities increased $640,670, representing a 3.2 percent increase
        from 2005

        General revenues accounted for $20,280,530 in revenue or 87.7 percent of total revenues.
        Program specific revenues in the form of charges for services, operating grants, contributions and
        interest, and capital grants and contributions accounted for $2,848,176 or 12.3 percent of total
        revenues of $23,128,706.

        The School District had $22,488,036 in expenses related to governmental activities; only
        $2,848,176 of these expenses was offset by program specific charges for services, grants,
        contributions and interest. General revenues of $20,280,530 were adequate to provide for these
        programs.


Using this Annual Financial Report

This annual report consists of a series of financial statements and notes to those statements. These
statements are organized so the reader can understand Crestwood Local School District as a financial
whole, an entire operating entity. The statements then proceed to provide an increasingly detailed look at
specific financial activities.

The statement of net assets and statement of activities provide information about the activities of the
whole School District, presenting both an aggregate view of the School District s finances and a longer-
term view of those finances. Fund financial statements provide the next level of detail. For governmental
funds, these statements present how services were financed in the short-term as well as what remains for
future spending. The fund financial statements also look at the School District s most significant funds
with all other nonmajor funds presented in total in one column.




                                                     3
                            Crestwood Local School District
                          Management s Discussion and Analysis
                          For the Fiscal Year Ended June 30, 2006
                                         Unaudited
_____________________________________________________________________________________

Reporting the School District as a Whole

Statement of Net Assets and the Statement of Activities

While these statements contain information about the large number of funds used by the School District to
provide programs and activities, the view of the School District as a whole looks at all financial
transactions and asks the question, How did we do financially during 2006? The statement of net assets
and the statement of activities answer this question. These statements include all non-fiduciary assets and
liabilities using the accrual basis of accounting similar to the accounting used by most private-sector
companies. This basis of accounting, takes into account, all of the current year s revenues and expenses
regardless of when cash is received or paid.

These two statements report the School District s net assets and changes in those assets. This change in
net assets is important because it tells the reader that, for the School District as a whole the financial
position of the School District has improved or diminished. The causes of this change may be the result
of many factors, some financial, some not. Non-financial factors include the School District s current
property tax base, current property tax laws in Ohio restricting revenue growth, facility conditions,
required educational programs and other factors.

In the statement of net assets and the statement of activities, the School Districts activities are considered
to be all Governmental Activities:

Governmental Activities - Most of the School District s programs and services are reported here including
instruction, support services, operation of non-instructional services, extracurricular activities and food
service operations.

Reporting the School District s Most Significant Funds

Fund Financial Statements

The analysis of the School District s major funds begins on page 14. Fund financial reports provide
detailed information about the School District s major funds. The School District uses many funds to
account for a multitude of financial transactions. However, these fund financial statements focus on the
School District s most significant funds. The School District s major governmental funds are the general
fund and the Classroom Facilities capital projects fund.

Governmental Funds Most of the School District s activities are reported in governmental funds, which
focus on how money flows into and out of those funds and the balances left at year-end available for
spending in future periods. These funds are reported using an accounting method called modified accrual
accounting, which measures cash and all other financial assets that can readily be converted to cash. The
governmental fund statements provide a detailed short-term view of the School District s general
government operations and the basic services it provides. Governmental fund information helps
determine whether there are more or fewer financial resources that can be spent in the near future to
finance educational programs. The relationship (or differences) between governmental activities
(reported in the statement of net assets and the statement of activities) and governmental funds is
reconciled in the financial statements.




                                                      4
                            Crestwood Local School District
                          Management s Discussion and Analysis
                          For the Fiscal Year Ended June 30, 2006
                                         Unaudited
_____________________________________________________________________________________

The School District as a Whole

Recall that the statement of net assets provides the perspective of the School District as a whole.

Table 1 provides a summary of the School District s net assets for 2006 compared to 2005:

                                                            Table 1
                                                           Net Assets
                                                                               Governmental Activities
                                                                            2006                     2005
         Assets
         Current and other assets                                       $   13,780,990         $   13,269,899
         Capital assets, net of depreciation                                25,186,454             25,177,981
          Total assets                                                      38,967,444             38,447,880

         Liabilities
         Current and other liabilities                                       9,516,272              9,363,554
         Long-term liabilities                                               8,546,850              8,820,674
          Total liabilities                                                 18,063,122             18,184,228

         Net Assets
         Invested in capital assets, net of related debt                    17,542,601             17,256,044
         Restricted                                                          3,296,118              3,450,525
         Unrestricted                                                           65,603               (442,917)
          Total net assets                                              $   20,904,322         $   20,263,652

Over time, net assets can serve as a useful indicator of a government s financial position. At June 30,
2006, the School District s assets exceeded liabilities by $20,904,322, an increase of $640,670 from net
assets at June 30, 2005. Current and other assets increased by $511,091 while capital assets, net of
depreciation increased by $8,473. The change in the School District s assets is primarily related to the
disbursement of cash from the Classroom Facilities fund and the related acquisition of capital assets. The
increase in net assets is a favorable indication of the School District s financial condition.

Capital assets reported on the government-wide statements represent the largest portion of the School
District s net assets for fiscal year 2006. Capital assets include land, construction in progress, buildings,
furniture and equipment, and vehicles which are used to provide services to students and are not available
for future spending. Although the School District s investment in capital assets is reported net of related
debt, it should be noted that the resources to repay the debt must be provided from other sources, since
capital assets may not be used to liquidate these liabilities.

A portion of the School District s net assets, $3,296,118 represents resources that are subject to external
restrictions on how the funds may be used. Of the total restricted assets, $520,110 is restricted for debt
service payments; $2,030,202 is restricted for capital projects; $31,486 is restricted for scholarships and
$714,320 is restricted for other purposes. Unrestricted net assets report a balance of $65,603, an increase
of $508,520 from prior year s deficiency.



                                                               5
                            Crestwood Local School District
                          Management s Discussion and Analysis
                          For the Fiscal Year Ended June 30, 2006
                                         Unaudited
_____________________________________________________________________________________

Table 2 reflects the changes in net assets for fiscal year 2006 compared to 2005:

                                                 Table 2
                                           Changes in Net Assets
                                                                        Governmental Activities
                                                                       2006                2005
Revenues
Program revenues
 Charges for services                                              $    1,568,641 $         2,439,101
 Operating grants, contributions and interest                           1,268,888           1,226,766
 Capital grants and contributions                                          10,647              22,267
General revenues
 Property taxes                                                         6,761,984           7,702,929
 Grants and entitlements                                               12,661,318          12,728,513
 Investment earnings                                                      221,532             106,809
 Miscellaneous                                                            635,696              23,211
  Total revenues                                                       23,128,706          24,249,596

Program Expenses
Instruction
 Regular                                                           $    9,270,563 $         9,442,012
 Special                                                                1,489,599           2,303,962
 Vocational                                                               188,714             185,384
 Other                                                                  1,048,799             557,086
Support services
 Pupils                                                                 1,178,940           1,068,996
 Instructional staff                                                    1,295,898           1,430,300
 Board of education                                                         7,196               6,022
 Administration                                                         2,180,525           2,612,958
 Fiscal                                                                   477,968             441,562
 Business                                                                  18,807              27,474
 Operation and maintenance of plant                                     2,063,179           2,037,986
 Pupil transportation                                                   1,492,409           1,759,205
 Central                                                                   93,197              69,849
Operation of non-instructional services
 Food service operations                                                  674,245             717,471
 Community services                                                       160,966              96,404
Extracurricular activities                                                449,826             522,577
Interest and fiscal charges                                               397,205             404,998
   Total expenses                                                      22,488,036          23,684,246

Excess (deficit) before special and extraordinary items                   640,670             565,350

Special item - gain on sale of capital assets                                   -              41,189
Increase (decrease) in net assets                                  $      640,670 $           606,539




                                                            6
                            Crestwood Local School District
                          Management s Discussion and Analysis
                          For the Fiscal Year Ended June 30, 2006
                                         Unaudited
_____________________________________________________________________________________

Governmental Activities

Several revenue sources fund our governmental activities with property tax and school foundation
revenues being the largest contributors. Property tax levies generated over $6.7 million in 2006. General
revenues from grants and entitlements, such as the school foundation program, generated over $12.6
million. With the combination of taxes and intergovernmental funding comprising approximately 84% of
all revenues, the School District monitors both of these revenue sources very closely for fluctuations.

Instructional expenses of the School District include activities directly related to the teaching of pupils as
well as the interaction between teacher and pupil and the purchase of textbooks and instructional supplies
and materials. These expenses totaled $11,997,675, or 53.4% of the total program expenses of the School
District.

Support services expenses for the pupils and instruction staff programs totaled $2,474,838 in the current
year, or 11% of the total program expenses of the School District. These expenses include library,
guidance, speech and hearing, and psychological services. The decrease in expenses over prior year in
the amount of $24,458 is attributed mainly to a decrease in student enrollment.

Administration expenses of the School District include services of the Superintendent, and Principals
offices as well as public relations activities. Current year administrative expenses were $2,180,525,
which represents 9.7% of the total program expenses. Expenses of this School District program
decreased $432,433 over the prior year due to decreases in staff and student enrollment.

Costs associated with the operation and maintenance of plant represent those expenses necessary for the
care and upkeep of School District s buildings, grounds and equipment. Current year expenses of
$2,063,179 made up almost 9.2% of all governmental expenses.

The statement of activities shows the cost of program services and the charges for services and grants
offsetting those services. Table 3 shows, for government activities, the total cost of services and the net
cost of services. That is, it identifies the cost of these services supported by tax revenue and unrestricted
State entitlements.




                                                      7
                            Crestwood Local School District
                          Management s Discussion and Analysis
                          For the Fiscal Year Ended June 30, 2006
                                         Unaudited
_____________________________________________________________________________________

                                                    Table 3
                                              Governmental Activities

                                            Total Cost            Total Cost          Net Cost             Net Cost
                                            of Services           of Services        of Services          of Services
                                               2006                  2005               2006                 2005
Program Expenses
Instruction:
 Regular                                $      9,270,563      $      9,442,012   $      (9,159,208)   $      (8,535,643)
 Special                                       1,489,599             2,303,962            (120,463)            (912,333)
 Vocational                                      188,714               185,384            (188,714)            (185,384)
 Other                                         1,048,799               557,086          (1,048,799)            (557,086)
Support services:
 Pupils                                        1,178,940             1,068,996          (1,024,540)            (946,780)
 Instructional staff                           1,295,898             1,430,300          (1,097,068)          (1,189,385)
 Board of education                                7,196                 6,022              (7,196)              (6,022)
 Administration                                2,180,525             2,612,958          (2,163,286)          (2,586,749)
 Fiscal                                          477,968               441,562            (477,968)            (441,562)
 Business                                         18,807                27,474             (18,807)             (27,474)
 Operation and maintenance of plant            2,063,179             2,037,986          (2,047,392)          (2,034,693)
 Pupil transportation                          1,492,409             1,759,205          (1,470,958)          (1,736,938)
 Central                                          93,197                69,849             (80,658)             (43,789)
Operation non-instructional services:
 Food service operations                         674,245               717,471             (24,172)             (49,229)
 Community services                              160,966                96,404             (40,546)              12,283
Extracurricular activities                       449,826               522,577            (272,880)            (350,330)
Interest and fiscal charges                      397,205               404,998            (397,205)            (404,998)
   Total expenses                       $     22,488,036      $     23,684,246   $     (19,639,860)   $     (19,996,112)



The School District depends on both property taxes and State funding which fund approximately 86.4%
of the program expenses of the School District.

The School District s Funds

The School District s governmental funds are accounted for using the modified accrual basis of
accounting. The total revenues for governmental funds were $23,897,526, and total expenditures were
$22,771,295. The general fund is reporting a fund balance of $103,792, an increase of $1,321,793 from
2005. This increase was able to be reported, as expenses were able to be kept in line with available
revenues.




                                                          8
                            Crestwood Local School District
                          Management s Discussion and Analysis
                          For the Fiscal Year Ended June 30, 2006
                                         Unaudited
_____________________________________________________________________________________

General Fund Budgeting Highlights

The School District s budget is prepared according to Ohio law and is based on accounting for certain
transactions on a basis of cash receipts, disbursements and encumbrances. The most significant budgeted
funds are the general fund and the Classroom Facilities capital project fund.

During fiscal year 2006, the School District amended its appropriation budget several times, however
none were significant. Budget revisions are presented to the Board of Education for approval.

For the general fund, the final budget basis revenue estimate was $20,863,415 which was higher than the
original budget estimate of $20,166,679. This difference of $696,736 was due to changes in state and
federal grants as well as state foundation funding, the exact amounts of which are often unknown during
the original budgeting process. Near the closing of the fiscal year, the Treasurer adjusts the final budget
(estimated resources) in the accounting system to reflect the actual amounts received or anticipated to be
received by June 30, 2006. Due to these adjustments, the variance between the actual and final budget are
immaterial.

The general fund s original expenditures estimate of $21,313,502 was increased slightly during the fiscal
year. However, no significant expenditure budget revisions were posted to any specific account during
the year. Actual expenditures and other financing uses total $20,078,657, or $1,931,581 lower than the
final amount budgeted. The final budgeted amount represents an amount equal to the amount of available
resources that may be expended.

Capital Assets and Debt Administration

Capital Assets

At the end of fiscal year 2006, the School District had $25,186,454 invested in land and improvements,
buildings, furniture and equipment, vehicles and construction in progress. Table 4 shows fiscal year 2006
balances compared to fiscal year 2005:

                                                    Table 4
                                         Capital Assets at June 30, 2006
                                             (Net of Depreciation)

                                                                 Governmental Activities
                                                              2006                     2005
                  Land                               $        1,550,480         $       1,548,490
                  Land improvements                              34,075                         -
                  Buildings                                   1,485,453                 1,564,044
                  Furniture and equipment                     1,357,273                 1,443,339
                  Vehicles                                      829,288                 1,022,877
                  Construction in progress                   19,929,885               19,599,231
                   Total capital assets              $       25,186,454         $ 25,177,981




                                                         9
                            Crestwood Local School District
                          Management s Discussion and Analysis
                          For the Fiscal Year Ended June 30, 2006
                                         Unaudited
_____________________________________________________________________________________

Capital assets continue to increase with the ongoing construction of two new elementary schools in the
School District. The School District s capital budget calls for it to spend another $336,589 in
construction costs in fiscal year 2007. Total projects costs are budgeted at $19,092,835. See Note 7 to
the basic financial statements for detail on the School District s capital assets.

Debt

At June 30, 2006 the School District had $7,575,416 in bonds outstanding with $315,000 due within one
year. Table 5 summarizes the bonds, loans and capital leases outstanding as of the end of the fiscal year
as compared to 2006:

                                               Table 5
                                  Outstanding Debt, at Fiscal Year End

                                                     Governmental           Governmental
                                                       Activities             Activities
                                                         2006                   2005
            2001 School Improvement Bonds            $ 7,385,952            $ 7,632,309
            2001 Site Acquisition Bonds                    189,464                193,361
            EPA Asbestos Removal Loan                        48,310                 55,211
            Capital Leases                                   20,127                 41,056
             Total outstanding debt                  $ 7,643,853            $ 7,921,937

In fiscal year 2001, the School District issued bonds for the site acquisition and construction of classroom
facilities in the amount of $210,000 and $8,474,000 respectively. Each of the bond issues will mature on
December 1, 2023. All bonds are general obligation bonds for which the full faith and credit of the
School District is pledged. These bonds will be paid from property taxes in the Bond Retirement debt
service fund.

In fiscal year 1994, the School District obtained an EPA Asbestos loan in the amount of $124,221 in
order to undertake an asbestos abatement project. The EPA Asbestos loan will be paid from property
taxes, receipted into the general fund and subsequently transferred to the Bond Retirement debt service
fund, and will mature on May 1, 2013.

At June 30, 2006, the School District s overall legal debt margin was $18,737,194 with an unvoted debt
margin of $285,266. Moody s Investors Service last rated the School District in April 2003 with a rating
of Aaa. The rating was obtained as a result of the purchase of an insurance policy provided by Financial
Guaranty Insurance Company. See Note 13 to the basic financial statements for detail on the School
District s long-term obligations.




                                                     10
                            Crestwood Local School District
                          Management s Discussion and Analysis
                          For the Fiscal Year Ended June 30, 2006
                                         Unaudited
_____________________________________________________________________________________

Current Issues Affecting Financial Condition

The Board of Education and administration closely monitor its revenues and expenditures in accordance
with its financial forecast. The financial future of the School District is not without its challenges though.
These challenges stem from issues that are local and at the State level. The local challenges will continue
to exist, as the School District must rely heavily on property taxes to fund its operations. State level
challenges continue to evolve as the State of Ohio determines the outcome of the Ohio Supreme Court
case dealing with the unconstitutionality of the State s educational funding system. Although the School
District relies heavily on its property taxpayers to support its operations, the community support for the
School District is quite strong.

Due to the unsettled issues in school funding, management is required to plan carefully and prudently to
provide the resources to meet student needs over the next several years.

In conclusion, the School District s system of budgeting and internal controls is well regarded. All of the
School District s financial abilities will be needed to meet the challenges of the future.

Contacting the School District s Financial Management

This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general
overview of the School District s finances and to show the School District s accountability for the money
it receives. If you have questions or need additional financial information, contact Carol F. Corbett,
Treasurer, at Crestwood Local School District, 4565 West Prospect St., Mantua, Ohio 44255 or E-Mail at
Corbett@sparcc.org.




                                                     11
Crestwood Local School District
Statement of Net Assets
June 30, 2006

                                                                     Governmental
                                                                      Activities
Assets:
Equity in pooled cash and cash equivalents                       $        5,422,338
Cash and cash equivalents:
 In segregated accounts                                                     34,319
Investments in segregated accounts                                          26,480
Receivables:
 Taxes                                                                    7,366,508
 Accounts                                                                   572,145
 Due from agency fund                                                        16,900
 Intergovernmental                                                          167,654
Inventory held for resale                                                    22,308
Materials and supplies inventory                                              2,614
Restricted assets:
Equity in pooled cash and cash equivalents (restricted)                    149,724
Capital assets:
 Land and construction in progress                                      21,480,365
 Depreciable capital assets, net                                         3,706,089
 Total capital assets                                                   25,186,454
Total assets                                                            38,967,444

Liabilities:
Accounts payable                                                             52,265
Accrued wages and benefits                                                2,051,728
Compensated absences payable                                                204,864
Intergovernmental payable                                                   599,186
Deferred revenue                                                          6,579,952
Accrued interest payable                                                     28,277
Long-term liabilities:
 Due within one year                                                        418,147
 Due in more than one year                                                8,128,703
Total liabilities                                                       18,063,122

Net assets:
Invested in capital assets, net of related debt                          17,542,601
Restricted for:
 Capital projects                                                         2,030,202
 Debt service                                                               520,110
 Permanent fund purpose - scholarships
  Nonexpendable                                                             31,486
 Other purposes                                                            714,320
Unrestricted                                                                65,603
Total net assets                                                 $      20,904,322

See accompanying notes to the basic financial statements.




                                                            12
Crestwood Local School District
Statement of Activities
For the Fiscal Year Ended June 30, 2006

                                                                                                                                Net (Expense)
                                                                                                                                Revenue and
                                                                                                                                 Changes in
                                                                                    Program Revenues                             Net Assets
                                                                                    Operating Grants,    Capital Grants,
                                                                    Charges for     Contributions and   Contributions and       Governmental
                                            Expenses                 Services            Interest           Interest             Activities
Governmental Activities:
Instruction:
 Regular                                $       9,270,563       $               -   $        111,355    $               -   $       (9,159,208)
 Special                                        1,489,599               1,001,070            368,066                    -             (120,463)
 Vocational                                       188,714                       -                  -                    -             (188,714)
 Other                                          1,048,799                       -                  -                    -           (1,048,799)
Support services:
 Pupils                                         1,178,940                   8,841            145,559                   -            (1,024,540)
 Instructional staff                            1,295,898                   2,511            196,319                   -            (1,097,068)
 Board of education                                 7,196                       -                  -                   -                (7,196)
 Administration                                 2,180,525                       -             17,239                   -            (2,163,286)
 Fiscal                                           477,968                       -                  -                   -              (477,968)
 Business                                          18,807                       -                  -                   -               (18,807)
 Operation and maintenance of plant             2,063,179                   2,475             13,312                   -            (2,047,392)
 Pupil transportation                           1,492,409                       -             10,804              10,647            (1,470,958)
 Central                                           93,197                       -             12,539                   -               (80,658)
 Food service operations                          674,245                 448,033            202,040                   -               (24,172)
 Community services                               160,966                       -            120,420                   -               (40,546)
Extracurricular activities                        449,826                 105,711             71,235                   -              (272,880)
Interest and fiscal charges                       397,205                       -                  -                   -              (397,205)
Total governmental activities           $     22,488,036        $       1,568,641   $      1,268,888    $         10,647           (19,639,860)

                                       General Revenues:
                                        Property taxes levied for:
                                          General purposes                                                                           5,825,680
                                          Debt service                                                                                 553,084
                                          Capital outlay                                                                               383,220
                                        Grants and entitlements not restricted to specific programs                                 12,661,318
                                        Investment earnings                                                                            221,532
                                        Miscellaneous                                                                                  635,696
                                       Total general revenues                                                                       20,280,530

                                       Change in net assets                                                                            640,670

                                       Net assets beginning of year                                                                 20,263,652
                                       Net assets end of year                                                               $       20,904,322

See accompanying notes to the basic financial statements.




                                                                         13
Crestwood Local School District
Balance Sheet
Governmental Funds
June 30, 2006

                                                                                                           Other               Total
                                                                                   Classroom            Governmental        Governmental
                                                                General            Facilities              Funds               Funds
Assets:
Equity in pooled cash and cash equivalents                  $     2,176,569    $      1,544,606     $       1,701,163   $        5,422,338
Cash and cash equivalents:
 In segregated accounts                                                   -              34,319                     -              34,319
Investments in segregated accounts                                        -                   -                26,480              26,480
Receivables:
 Taxes                                                            6,217,212                     -           1,149,296            7,366,508
 Accounts                                                           572,115                     -                  30              572,145
 Intergovernmental                                                        -                     -             167,654              167,654
 Interfund                                                           56,863                                         -               56,863
 Due from agency fund                                                16,900                     -                   -               16,900
Inventory held for resale                                                 -                     -              22,308               22,308
Materials and supplies inventory                                          -                     -               2,614                2,614
Equity in pooled cash and cash equivalents (restricted)             149,724                                         -              149,724
Total assets                                                $     9,189,383    $      1,578,925     $       3,069,545   $      13,837,853

Liabilities:
Accounts payable                                            $        34,064    $                -   $          18,201   $           52,265
Accrued wages and benefits                                        1,891,673                     -             160,055            2,051,728
Interfund payable                                                         -                     -              56,863               56,863
Intergovernmental payable                                           558,483                     -              40,703              599,186
Compensated absences payable                                        204,431                     -                 433              204,864
Deferred revenue                                                  6,396,940                     -           1,119,355            7,516,295
Total liabilities                                                 9,085,591                     -           1,395,610          10,481,201

Fund balances:
Reserved:
Reserved for encumbrances                                           343,561             336,589               125,646             805,796
Reserved for property taxes                                         343,663                   -                69,700             413,363
Reserved for textbooks and instructional materials                  129,499                   -                     -             129,499
Reserved for bus purchases                                           20,225                   -                     -              20,225
Reserved for endowments                                                   -                   -                26,480              26,480
Unreserved, undesignated, reported in:
 General fund                                                      (733,156)                  -                     -             (733,156)
 Special revenue funds                                                    -                   -               672,687              672,687
 Debt service fund                                                        -                   -               485,526              485,526
 Capital projects fund                                                    -           1,242,336               288,890            1,531,226
 Permanent fund                                                           -                   -                 5,006                5,006
Total fund balances                                                 103,792           1,578,925             1,673,935            3,356,652
Total liabilities and fund balances                         $     9,189,383    $      1,578,925     $       3,069,545   $      13,837,853

See accompanying notes to the basic financial statements.




                                                                     14
Crestwood Local School District
Reconciliation of Total Governmental Fund Balances to
Net Assets of Governmental Activities
June 30, 2006


Total governmental funds balances                                                                    $    3,356,652

Amounts reported for governmental activities in the
  statement of net assets are different because:

Capital assets used in governmental activities are not financial
  resources and therefore are not reported in the funds.                                                 25,186,454

Other long-term assets that are not available to pay for current-period
   expenditures and therefore are deferred in the funds:
       Property taxes                                                           $        373,193
       Intergovernmental                                                                  39,759
       Tuition and fees                                                                  523,391
        Total                                                                                              936,343

In the statement of activities, interest is accrued on outstanding bonds, whereas in
    governmental funds, an interest expenditure is reported when due.                                       (28,277)

Long-term liabilities that are not due and payable in the current period and
  therefore are not reported in the funds:
      General obligation bonds                                                  $      (7,575,416)
      Asbestos removal loan                                                               (48,310)
      Compensated absences                                                               (902,997)
      Capital leases                                                                      (20,127)
      Total                                                                                              (8,546,850)
Net assets of governmental activities                                                                $   20,904,322

See accompanying notes to the basic financial statements.




                                                                          15
Crestwood Local School District
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2006
                                                                                                           Other                 Total
                                                                                   Classroom            Governmental          Governmental
                                                                General            Facilities              Funds                 Funds
Revenues:
Taxes                                                       $     5,712,829    $              -     $        1,041,010    $        6,753,839
Intergovernmental                                                12,546,412                   -              1,270,500            13,816,912
Interest                                                            166,715              54,818                  2,469               224,002
Tuition and fees                                                  1,724,585                   -                 90,564             1,815,149
Extracurricular activities                                                -                   -                117,024               117,024
Gifts and donations                                                  28,580                   -                 24,671                53,251
Charges for services                                                  3,001                   -                448,033               451,034
Rent                                                                  2,999                   -                      -                 2,999
Miscellaneous                                                       590,410              15,862                 57,044               663,316
 Total revenues                                                  20,775,531              70,680              3,051,315            23,897,526

Expenditures:
Current:
 Instruction:
  Regular                                                         8,934,186                1,905               189,571             9,125,662
  Special                                                         1,159,680                    -               375,306             1,534,986
  Vocational                                                        179,424                    -                     -               179,424
  Other                                                           1,031,275                    -                     -             1,031,275
 Support services:
  Pupils                                                          1,014,720                   -                161,974             1,176,694
  Instructional staff                                             1,074,159                   -                180,419             1,254,578
  Board of education                                                  7,196                   -                      -                 7,196
  Administration                                                  2,145,317                   -                  2,000             2,147,317
  Fiscal                                                            454,964                   -                 21,180               476,144
  Business                                                           18,807                   -                      -                18,807
  Operation and maintenance of plant                              1,749,843              67,034                239,036             2,055,913
  Pupil transportation                                            1,274,110                   -                  9,919             1,284,029
  Central                                                            87,032                   -                  6,165                93,197
 Operation of non-instructional services:
  Food service operations                                                 -                   -                671,378              671,378
  Community services                                                      -                   -                160,379              160,379
 Extracurricular activities                                         291,872                   -                137,714              429,586
Capital outlay                                                            -              58,490                389,989              448,479
Debt service:
 Principal retirement                                                20,929                     -              306,901              327,830
 Interest and fiscal charges                                          3,323                     -              345,098              348,421
 Total expenditures                                              19,446,837             127,429              3,197,029            22,771,295
Excess (deficiency) of revenues over expenditures                 1,328,694              (56,749)             (145,714)            1,126,231

Other financing sources (uses):
Transfers in                                                              -                     -                6,901                 6,901
Transfers out                                                        (6,901)                    -                    -                (6,901)
 Total other financing sources (uses)                                (6,901)                    -                6,901                       -

Net change in fund balances                                       1,321,793              (56,749)             (138,813)            1,126,231

Fund balances beginning of year                                  (1,218,001)          1,635,674              1,812,748             2,230,421
Fund balances end of year                                   $       103,792    $      1,578,925     $        1,673,935    $        3,356,652

See accompanying notes to the basic financial statements.


                                                                      16
Crestwood Local School District
Reconciliation of the Statement of Revenues, Expenditures and Changes
in Fund Balances of Governmental Funds to the Statement of Activities
For the Fiscal Year Ended June 30, 2006


Net change in fund balances - total governmental funds                                                       $ 1,126,231

Amounts reported for governmental activities in the
  statement of activities are different because:

Governmental funds report capital outlays as expenditures. However, in the statement of activities,
  the cost of capital assets is allocated over their estimated useful lives as depreciation expense.
  In the current period, these amounts are:
      Capital asset additions                                                         $     448,479
      Depreciation expense                                                                 (433,384)
       Excess of capital outlay over depreciation expense                                                         15,095

The sale of capital assets results in an other financing source in the governmental funds. In the
  government-wide statement, however, the assets sold had been capitalized previously and thus have a
  "book value" that needs to be removed. The difference between the proceeds and the book value is
  the gain or loss that is recognized in the statement of activities. This adjustment reduces the proceeds
  by the book value of the asset sold.
      Value of capital assets disposed                                               $      (6,622)
       Excess expenses over revenues                                                                               (6,622)

Revenues in the statement of activities that do not provide current financial resources are not
  reported as revenues in the funds. These activities consist of:
     Property taxes                                                                  $       8,140
     Intergovernmental                                                                      39,759
     Tuition and fees                                                                    (814,038)
     Charges for services                                                                     (526)
     Miscellaneous                                                                          (2,155)
      Net change in deferred revenues during the year                                                            (768,820)

Repayment of debt and capital lease principal is an expenditure in the governmental funds, but the
  repayment reduces long-term liabilities in the statement of net assets.                                        327,830

Some items reported in the statement of activities do not require the use of current financial
  resources and therefore are not reported as expenditures in governmental funds. These
  activities consist of:
     Increase in compensated absences                                                $      (4,260)
     Decrease in accrued interest                                                              962
       Total additional expenditures                                                                               (3,298)

The amortization of accretion is reflected as an expense in the statement of activities                           (49,746)
Change in net assets of governmental activities                                                              $   640,670

See accompanying notes to the basic financial statements.




                                                                          17
Crestwood Local School District
Statement of Revenues, Expenditures and Changes in Fund Balance-
Budget (Non-GAAP Basis) and Actual
General Fund
For the Fiscal Year Ended June 30, 2006
                                                                                                                        Variance with
                                                                                                                        Final Budget
                                                             Original             Final                                    Positive
                                                             Budget              Budget              Actual              (Negative)
Revenues:
Taxes                                                  $        6,124,392    $     6,124,392     $     6,101,387    $           (23,005)
Intergovernmental                                              12,239,492         12,854,209          12,546,412               (307,797)
Interest                                                          166,715            166,715             166,715                      -
Tuition and fees                                                1,292,501          1,357,416           1,746,402                388,986
Gifts and donations                                                   535                562              28,580                 28,018
Charges for services                                                   86                 90               4,568                  4,478
Rent                                                                3,013              3,013               3,014                      1
Miscellaneous                                                     339,945            357,018             344,157                (12,861)
  Total revenues                                               20,166,679         20,863,415          20,941,235                 77,820

Expenditures:
Current:
  Instruction:
    Regular                                                     9,643,900           9,959,158          8,977,948               981,210
    Special                                                     1,330,025           1,373,503          1,238,181               135,322
    Vocational                                                    211,371             218,281            196,775                21,506
    Other                                                       1,084,005           1,119,441          1,009,150               110,291
  Support services:
    Pupils                                                      1,074,887           1,110,025          1,000,662               109,363
    Instructional staff                                         1,134,236           1,171,314          1,055,912               115,402
    Board of education                                              7,730               7,982              7,196                   786
    Administration                                              2,296,329           2,371,396          2,137,758               233,638
    Fiscal                                                        488,361             504,326            454,638                49,688
    Business                                                       20,202              20,862             18,807                 2,055
    Operation and maintenance of plant                          1,988,803           2,053,817          1,851,468               202,349
    Pupil transportation                                        1,621,465           1,674,470          1,509,496               164,974
    Central                                                        94,321              97,405             87,808                 9,597
  Extracurricular activities                                      313,264             323,505            291,632                31,873
Capital outlay                                                      4,603               4,753              4,285                   468
  Total expenditures                                           21,313,502         22,010,238          19,841,716              2,168,522
Excess (deficiency) of revenues over expenditures              (1,146,823)         (1,146,823)         1,099,519              2,246,342

Other financing sources (uses):
Proceeds from the sale of capital assets                               30                 30                  30                      -
Refund of prior year expenditures                                       -                  -             234,138                234,138
Transfers in                                                      284,100            284,100                   -               (284,100)
Refund of prior year receipts                                           -                  -              (1,000)                (1,000)
Advances in                                                       183,096            183,096             183,096                      -
Advances out                                                            -                  -            (229,040)              (229,040)
Transfers out                                                           -                  -              (6,901)                (6,901)
 Total other financing sources (uses)                             467,226             467,226            180,323               (286,903)
Net change in fund balance                                       (679,597)       ($679,597.00)         1,279,842              1,959,439

Fund balances at beginning of year                                535,397            535,397            535,397                         -

Prior year encumbrances appropriated                              144,200            144,200             144,200                      -
Fund balances at end of year                           $                -    $             -     $     1,959,439    $         1,959,439

 See accompanying notes to the basic financial statements.
                                                                        18
Crestwood Local School District
Statement of Fiduciary Net Assets
Fiduciary Funds
June 30, 2006

                                                            Private Purpose
                                                                 Trust
                                                              Scholarship             Agency
Assets:
Equity in pooled cash and cash equivalents                  $           307       $       71,182
Investments in segregated accounts                                   12,214                    -
 Total assets                                                        12,521       $       71,182



Liabilities:
Accounts payable                                            $                 -   $        2,391
Due to general fund                                                           -           16,900
Due to students                                                               -           51,891
 Total liabilities                                                            -   $       71,182

Net assets:
Restricted - expendable                                                 344
Held in trust for scholarships                                       12,177
 Total net assets                                           $        12,521

See accompanying notes to the basic financial statements.




                                                                     19
Crestwood Local School District
Statement of Changes in Fiduciary Net Assets
Private Purpose Trust Fund
For the Fiscal Year Ended June 30, 2006



                                                                Scholarships
Additions:
Interest                                                    $             307
Gifts and donations                                                        75
 Total additions                                                          382

Deductions:
Other expenses                                                           1,610

Change in net assets                                                    (1,228)

Net assets beginning of year                                           13,749
Net assets end of year                                      $          12,521

See accompanying notes to the basic financial statements.




                                                                        20
                                    Crestwood Local School District
                                  Notes to the Basic Financial Statements
                                  For the fiscal year ended June 30, 2006


NOTE 1 - DESCRIPTION OF THE SCHOOL DISTRICT

The Crestwood Local School District (the "School District") was formed in 1956 from a consolidation of
the Mantua and Shalersville township schools. In 1964, the Hiram township schools joined the School
District which currently covers seventy-five square miles.

The School District operates under a locally elected five-member Board form of government and provides
educational services as mandated by state and/or federal agencies. The Board controls the School
District's four instructional/support facilities staffed by 126 non-certificated employees and 187
certificated full time teaching and support personnel who provide services to 2,574 students and other
community members.

Reporting Entity

The reporting entity is composed of the primary government, component units and other organizations
that are included to ensure that the financial statements of the School District are not misleading. The
primary government consists of all funds, departments, boards and agencies that are not legally separate
from the School District. For Crestwood Local School District, this includes general operations, food
service, preschool and student related activities of the School District.

Component units are legally separate organizations for which the School District is financially
accountable. The School District is financially accountable for an organization if the School District
appoints a voting majority of the organizations' governing board and (1) the School District is able to
significantly influence the programs or services performed or provided by the organization; or (2) the
School District is legally entitled to or can otherwise access the organizations' resources; the School
District is legally obligated or has otherwise assumed the responsibility to finance the deficits of or
provide financial support to, the organization; or the School District is obligated for the debt of the
organization. Component units may also include organizations that are fiscally dependent on the School
District in that the School District approves their budget, the issuance of their debt or the levying of their
taxes.

Within the boundaries of the School District, Saint Joseph of Mantua School is operated as a private school.
State legislation provides funding to this private school. The School District receives the money and then
disburses the money as directed by the private school. Such transactions are reported as governmental
activities in a special revenue fund of the School District.

The School District is associated with the Stark Portage Area Computer Consortium, the Portage County
School Consortium and the Maplewood Career and Technical Center that are defined as jointly governed
organizations. Jointly governed organizations are governed by representatives from each of the governments
that create the organizations, but there is no ongoing financial interest or responsibility by the participating
governments. Information regarding these organizations is presented in Note 14.




                                                      21                                            (Continued)
                                   Crestwood Local School District
                                 Notes to the Basic Financial Statements
                                 For the fiscal year ended June 30, 2006


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the School District have been prepared in conformity with generally accepted
accounting principles in the United States (GAAP) as applied to governmental units. The Governmental
Accounting Standards Board (GASB) is the accepted standard-setting entity for establishing governmental
accounting and financial reporting principles. Following are the more significant of the School District s
accounting polices.

A. Basis of Presentation

The School District s basic financial statements consist of government-wide statements, including a
statement of net assets and a statement of activities, and fund financial statements, which provide a more
detailed level of financial information.

Government-wide Financial Statements

The statement of net assets and the statement of activities display information about the School District as
a whole. These statements include the financial activities of the primary government, except for fiduciary
funds. The effect of interfund activity within the governmental type activities column has been removed
from these statements.

The statement of net assets presents the financial condition of the governmental activities of the School
District at year-end. The statement of activities presents a comparison between direct expenses and
program revenues for each program or function of the School District s governmental activities. Direct
expenses are those that are specifically associated with a service, program, or department and therefore
clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the
goods or services offered by the program and grants and contributions that are restricted to meeting the
operational or capital requirements of a particular program and interest earned on grants that is required to
be used to support a particular program. Revenues that are not classified as program revenues are
presented as general revenues of the School District, with certain limited exceptions. The comparison of
direct expenses with program revenues identifies the extent to which each business segment or
governmental function is self-financing or draws from the general revenues of the School District.

Fund Financial Statements

During the year, the School District segregates transactions related to certain School District functions or
activities in separate funds in order to aid financial management and to demonstrate legal compliance.
Fund financial statements are designed to present financial information of the School District at this more
detailed level. The focus of governmental and enterprise fund financial statements is on major funds
rather than reporting funds by type. Each major fund is presented in a separate column. Nonmajor funds
are aggregated and presented in a single column. Fiduciary funds are reported by fund type.




                                                     22
                                   Crestwood Local School District
                                 Notes to the Basic Financial Statements
                                 For the fiscal year ended June 30, 2006


B. Fund Accounting

The School District uses funds to maintain its financial records during the fiscal year. Fund accounting is
designed to demonstrate legal compliance and to aid management by segregating transactions related to
certain School District functions or activities. A fund is defined as a fiscal and accounting entity with a
self-balancing set of accounts. The various funds of the School District are grouped into two categories:
governmental and fiduciary.

Governmental Funds:

Governmental funds focus on the sources, uses, and balances of current financial resources. Expendable
assets are assigned to the various governmental funds according to the purposes for which they may or
must be used. Current liabilities are assigned to the fund from which they will be paid. The difference
between governmental fund assets and liabilities is reported as fund balance. The following are the
School District s major governmental funds:

        General Fund - The general fund is the operating fund of the School District and is used to
        account for all financial resources except those required to be accounted for in another fund. The
        general fund balance is available to the School District for any purpose provided it is expended or
        transferred according to the general laws of Ohio.

        Classroom Facilities capital projects fund - The classroom facilities capital projects fund accounts
        for monies received and expended in connection with contracts entered into by the School
        District and the Ohio Department of Education for the building and equipping of classroom
        facilities.

Fiduciary Fund Types:

Fiduciary fund reporting focuses on net assets and changes in net assets. The fiduciary fund category is
split into four classifications: pension trust funds, investment trust funds, private-purpose trust funds, and
agency funds. Trust funds are used to account for assets held by the School District under a trust
agreement for individuals, private organizations, or other governments and are therefore not available to
support the School District s own programs. The School District s only trust fund is a private purpose
trust which accounts for several scholarship programs for students. Agency funds are custodial in nature
(assets equal liabilities) and do not involve measurement of results of operations. The School District s
only agency fund accounts for student managed activities.

C. Measurement Focus

Government-wide Financial Statements

The government-wide financial statements are prepared using the economic resources measurement focus.
All non-fiduciary assets and liabilities associated with the operation of the School District are included on
the statement of net assets.




                                                     23                                           (Continued)
                                  Crestwood Local School District
                                Notes to the Basic Financial Statements
                                For the fiscal year ended June 30, 2006


Fund Financial Statements

All governmental funds are accounted for using a flow of current financial resources measurement focus.
With this measurement focus, only current assets and current liabilities generally are included on the
balance sheet. The statement of revenues, expenditures and changes in fund balances reports on the
sources (i.e., revenues and other financing sources) and uses (i.e., expenditures and other financing uses)
of current financial resources. This approach differs from the manner in which the governmental
activities of the government-wide financial statements are prepared. Governmental fund financial
statements therefore include reconciliations with brief explanations to better identify the relationship
between the government-wide statements and the statements for governmental funds.

The private purpose trust fund is reported using the economic resources measurement focus.

D. Basis of Accounting

Basis of accounting determines when transactions are recorded in the financial records and reported on
the financial statements. Government-wide financial statements are prepared using the accrual basis of
accounting. Governmental funds use the modified accrual basis of accounting. The private purpose trust
fund and the agency fund also use the accrual basis of accounting. Differences in the accrual and
modified accrual basis of accounting arise in the recognition of revenue, the recording of deferred revenue
and in the presentation of expenses versus expenditures.

Revenues - Exchange and Non-exchange Transactions

Revenue resulting from exchange transactions, in which each party gives and receives essentially equal
value, is recorded on the accrual basis when the exchange takes place. On a modified accrual basis,
revenue is recorded in the fiscal year in which the resources are measurable and become available.
 Measurable means the amount of the transaction can be determined and available means collectible
within the current fiscal year or soon enough thereafter to be used to pay liabilities of the current fiscal
year. For the School District, available means expected to be received within sixty days of fiscal year
end.

Nonexchange transactions, in which the School District receives value without directly giving equal value
in return, include property taxes, grants, entitlements, and donations. Revenue from property taxes is
recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and
donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Eligibility requirements include timing requirements, which specify the year when the resources are
required to be used or the fiscal year when use is first permitted; matching requirements, in which the
School District must provide local resources to be used for a specified purpose; and expenditure
requirements, in which the resources are provided to the School District on a reimbursement basis. On a
modified accrual basis, revenue from nonexchange transactions must also be available before it can be
recognized.

Under the modified accrual basis, the following revenue sources are considered to be both measurable and
available at fiscal year end: property taxes available as an advance, grants, investment earnings, tuition,
and student fees.




                                                    24
                                  Crestwood Local School District
                                Notes to the Basic Financial Statements
                                For the fiscal year ended June 30, 2006


Deferred Revenue

Deferred revenue arises when assets are recognized before revenue recognition criteria have been
satisfied. Property taxes (excluding delinquent taxes) for which there is an enforceable legal claim as of
June 30, 2006, but which were levied to finance fiscal year 2007 operations, have been recorded as
deferred revenue. Grants and entitlements received before the eligibility requirements are met are also
recorded as deferred revenue.

On the governmental fund financial statements, receivables that will not be collected within the available
period have also been reported as deferred revenue.

Expenditures/Expenses

On the accrual basis of accounting, expenses are recognized at the time they are incurred. The fair value
of donated commodities used during the year is reported in the fund financial statements as
intergovernmental revenue and an expenditure of food service operations. In addition, this amount is
reported on the statement of activities as an expense with a like amount reported within the Operating
Grants, Contributions and Interest program revenue account.

The measurement focus of governmental fund accounting is on decreases in net financial resources
(expenditures) rather than expenses. Expenditures are generally recognized in the accounting period in
which the related fund liability is incurred, if measurable. Allocations of cost, such as depreciation and
amortization, are not recognized in governmental funds.

E. Budgetary Data

The budgetary process is prescribed by provisions of the Ohio Revised Code and entails the preparation
of budgetary documents within an established timetable. The major documents prepared are the Tax
Budget, the Certificate of Estimated Resources, and the Appropriation Resolution, all of which are
prepared on the budgetary basis of accounting. All funds, other than agency funds, are legally required to
be budgeted and appropriated. The primary level of budgetary control is at the fund level for all funds.
Any budgetary modifications at this level may only be made by resolution of the Board of Education.

The Certificate of Estimated Resources and the Appropriations Resolution are subject to amendment
throughout the year with the legal restriction that appropriations cannot exceed estimated resources, as
certified. The amounts reported as the original budgeted revenue in the budgetary statements reflect the
amounts in the certificate when the original appropriations were adopted. The amounts reported as the
final budgeted revenue amounts in the budgetary statements reflect the amounts in the final amended
certificate issued during fiscal year 2006. The amounts reported as the original budgeted expenditure
amounts reflect the first appropriation for that fund that covered the entire fiscal year, including amounts
automatically carried over from prior years. The amounts reported as the final budgeted expenditure
amounts represent the final appropriation amounts passed by the Board during the year.

At the close of each year, the unencumbered balance of each appropriation reverts to the respective fund
from which it was appropriated and becomes subject to future appropriation. Encumbered appropriations
are carried forward to the succeeding fiscal year and are not reappropriated.




                                                    25                                          (Continued)
                                   Crestwood Local School District
                                 Notes to the Basic Financial Statements
                                 For the fiscal year ended June 30, 2006


F. Cash and Investments

To improve cash management, all cash received by the School District is pooled in a central bank
account. Monies for all funds are maintained in this account or temporarily used to purchase short-term
investments. Individual fund integrity is maintained through School District records. Each fund's interest
in the pool is presented on the statement of net assets in the account, "Equity in pooled cash and cash
equivalents". During the current fiscal year investments were limited to certificates of deposit, overnight
repurchase agreements, and STAROhio. All investments of the School District had a maturity of two
years or less. Except for nonparticipating investment contracts, investments are reported at fair value,
which is based on quoted market price. Nonparticipating investment contracts, such as repurchase
agreements and nonnegotiable certificates of deposit are reported at cost. Under existing Ohio statutes,
all investment earnings accrue to the general fund except those specifically related to certain trust funds,
unless the Board specifically allows the interest to be recorded in other funds. The Board of Education
has passed a resolution to allow interest to also be recorded in other funds as listed in Note 4.

G. Inventory

On the government-wide financial statements, inventories are presented at cost on a first-in, first-out basis
and are expensed when used.

Inventories of the food service special revenue fund are stated at cost, which is determined on a first-in,
first-out basis. Inventories of the food service fund consist of donated food, purchased food, and supplies
held for resale. Inventories reported on the fund financial statements are expensed when used.

H. Restricted Assets

Assets are reported as restricted assets when limitations on their use change the normal understanding of
the availability of the asset. Such constraints are either imposed by creditors, contributors, grantors, or
laws of other governments or imposed by enabling legislation. Restricted assets in the general fund may
include the amount required by State statute to be set aside to create a reserve for the purchase of
textbooks and instructional materials and buses. See Note 16 for additional information regarding
statutory reserves.




                                                     26
                                     Crestwood Local School District
                                   Notes to the Basic Financial Statements
                                   For the fiscal year ended June 30, 2006


I. Capital Assets

General capital assets are those assets resulting from expenditures in the governmental funds. These
assets are reported in the governmental activities column of the government-wide statement of net assets
but are not reported on the fund financial statements.

All capital assets are capitalized at cost (or estimated historical cost) and updated for additions and
reductions during the year. Donated capital assets are recorded at their fair market values as of the date
received. The School District maintains a capitalization threshold of five thousand dollars. The School
District does not possess any infrastructure. Improvements are capitalized; the costs of normal
maintenance and repairs that do not add to the value of the asset or materially extend an asset s life are
not capitalized. It is the policy of the School District to not capitalize interest costs incurred as part of
construction.

All reported capital assets, other than land and construction in progress, are depreciated. Depreciation is
computed using the straight-line method over the following useful lives:

                                          Description                 Estimated Lives
                        Land improvements                              5 - 20 years
                        Buildings                                      30 - 50 years
                        Furniture and equipment                        5 - 20 years
                        Vehicles                                       5 - 20 years

J. Interfund balances

On fund financial statements, receivables and payables resulting from short-term interfund loans are
classified as "interfund receivables/payables". These amounts are eliminated in the governmental
activities column of the statement of net assets.

K. Compensated absences

Vacation benefits are accrued as a liability as the benefits are earned if the employees rights to receive
compensation are attributable to services already rendered and it is probable that the School District will
compensate the employees for the benefits through paid time off or some other means.

Sick leave benefits are accrued as a liability using the termination method. An accrual for earned sick
leave is made to the extent that it is probable that the benefits will result in termination payments. The
liability is based on the School District s past experience of making termination payments. The entire
compensated absences liability is reported on the government-wide financial statements.

For governmental fund financial statements, the current portion of unpaid compensated absences is the
amount that is normally expected to be paid using expendable available financial resources. These
amounts are recorded in the account "compensated absences payable" in the fund from which the
employees who have accumulated leave are paid.




                                                        27                                       (Continued)
                                   Crestwood Local School District
                                 Notes to the Basic Financial Statements
                                 For the fiscal year ended June 30, 2006


L. Accrued liabilities and long-term obligations

All payables, accrued liabilities and long-term obligations are reported in the government-wide financial
statements.

In general, governmental fund payables and accrued liabilities that once incurred are paid in a timely
manner and in full from current financial resources, are reported as obligations of the funds. However,
claims and judgments, compensated absences, special termination benefits and contractually-required
pension contributions that will be paid from governmental funds are reported as a liability in the fund
financial statements only to the extent that they are due for payment during the current year. Long-term
loans are recognized as a liability on the governmental fund financial statements when due.

M. Net assets

Net assets represent the difference between assets and liabilities. Net assets invested in capital assets, net
of related debt consists of capital assets, net of accumulated depreciation, reduced by the spent
outstanding balances of any borrowings used for the acquisition, construction, or improvement of those
assets. Net assets are reported as restricted when there are limitations imposed on their use either through
enabling legislation adopted by the School District or through external restrictions imposed by creditors,
grantors or laws, or regulations of other governments.

The School District applies restricted resources when an expense is incurred for purposes for which both
restricted and unrestricted net assets are available.

N. Fund balance reserves

The School District reserves those portions of fund balance which are legally segregated for a specific
future use or which do not represent available expendable resources and therefore are not available for
appropriation or expenditure. Unreserved fund balance indicates that portion of the fund balance that is
available for appropriation in future periods. Fund balance reserves have been established for
encumbrances, property taxes, text books and instructional materials, bus purchases and endowments.

O. Interfund transactions

Interfund transfers are reported as other financing sources/uses for governmental funds in the fund
financial statements. All transfers between governmental funds have been eliminated within the
governmental activities column of the statement of net assets.

P. Estimates

The preparation of financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the amounts reported on the financial statements and accompanying
notes. Actual results may differ from those estimates.




                                                     28
                                   Crestwood Local School District
                                 Notes to the Basic Financial Statements
                                 For the fiscal year ended June 30, 2006


NOTE 3 - BUDGETARY BASIS OF ACCOUNTING

While the School District is reporting financial position, results of operations and changes in fund balance
on the basis of generally accepted accounting principles (GAAP), the budgetary basis as provided by law
and described above is based upon accounting for certain transactions on a basis of cash receipts,
disbursements and encumbrances. The Statement of Revenues, Expenditures and Changes in Fund
Balance Budget (Non-GAAP Basis) and Actual presented for the general fund is presented on the
budgetary basis to provide a meaningful comparison of actual results with the budget.

The major differences between the budget basis and GAAP basis are that:

        1.      Revenues are recorded when received in cash (budget basis) as opposed to when
                susceptible to accrual (GAAP basis).

        2.      Expenditures are recorded when paid in cash (budget basis) as opposed to when the
                liability is incurred (GAAP basis).

        3.      Encumbrances are treated as expenditures (budget basis) rather than as a reservation of
                fund balance (GAAP basis).

The following table summarizes the adjustments necessary to reconcile the GAAP basis statements to the
budgetary basis statements for the general fund.

                                         Net Change in Fund Balance

                                                                      General
                            GAAP basis                            $    1,321,793
                             Revenue accruals                            399,872
                             Advance in                                  183,096
                             Expenditure accruals                        (29,025)
                             Advance out                                (229,040)
                             Encumbrances (budget basis)
                              outstanding at year end                   (366,854)
                            Budget basis                          $    1,279,842



NOTE 4 - DEPOSITS AND INVESTMENTS

State statutes classify monies held by the School District into three categories.

Active deposits are public deposits necessary to meet current demands on the treasury. Such monies must
be maintained either as cash in the School District Treasury, in commercial accounts payable or
withdrawable on demand, including negotiable order of withdrawal (NOW) accounts, or in money market
deposit accounts.




                                                     29                                         (Continued)
                                   Crestwood Local School District
                                 Notes to the Basic Financial Statements
                                 For the fiscal year ended June 30, 2006


Inactive deposits are public deposits that the Board of Education has identified as not required for use
within the current five-year period of designation of depositories. Inactive deposits must either be
evidenced by certificates of deposit maturing not later than the end of the current period of designation of
depositories, or by savings or deposit accounts including, but not limited to, passbook accounts.

Interim deposits are deposits of interim monies. Interim monies are those monies which are not needed
for immediate use but which will be needed before the end of the current period of designation of
depositories. Interim deposits must be evidenced by time certificates of deposit maturing not more than
one year from the date of deposit or by savings or deposit accounts including pass book accounts.

Interim monies may be invested in the following obligations provided they mature or are redeemable
within five years from the date of settlement:

1.   United States Treasury bills, notes, bonds, or any other obligations or securities issued by the United
     States Treasury or any other obligations guaranteed as to principal and interest by the United States;

2.   Bonds, notes, debentures, or other obligations or securities issued by any federal government agency
     or instrumentality. All federal agency securities shall be direct issuances of federal government
     agencies or instrumentalities;

3.   Written repurchase agreements for a period not to exceed thirty days in securities listed above that
     mature within five years from the date of settlement;

4.   Bonds and other obligations of the State of Ohio;

5.   No-load money market mutual funds consisting exclusively of obligations described in item (1) or
     (2) above and repurchase agreements secured by such obligations, provided that investments in
     securities described in this division are made only through eligible institutions;

6.   The State Treasurer's investment pool (STAROhio);

7.   Certain bankers' acceptances and commercial paper notes in an amount not to exceed 25% of the
     interim monies available for investment at any one time and for a period not to exceed one hundred
     eighty days; and

8.   Under limited circumstances, corporate debt interests rated in either of the two highest rating
     classifications by at least two nationally recognized rating agencies.

Protection of the School District's deposits is provided by the Federal Deposit Insurance Corporation, by
eligible securities pledged by the financial institution as security for repayment, by surety company bonds
deposited with the Treasurer by the financial institution or by a single collateral pool established by the
financial institution to secure the repayment of all public monies deposited with the institution.

Investments may only be made through specified dealers and institutions. Payment for investments may
be made only upon delivery of the securities representing the investments to the Treasurer or, if the
securities are not represented by a certificate, upon receipt of confirmation of transfer from the custodian.




                                                     30
                                        Crestwood Local School District
                                      Notes to the Basic Financial Statements
                                      For the fiscal year ended June 30, 2006


A. Deposits:

For the fiscal year ended June 30, 2006, the School District reported $149,724 in Equity in pooled cash
and cash equivalents (restricted) on the balance sheet. The amount represents a reserve for textbooks
and instructional materials and school buses (see Note 16).

Custodial credit risk is the risk that, in the event of a bank failure, the School District s deposits may not
be returned. According to state law, public depositories must give security for all public funds on deposit
in excess of those funds that are insured by the federal deposit insurance corporation (FDIC) or by any
other agency or instrumentality of the federal government. These institutions may either specifically
collateralize individual accounts in lieu of amounts insured by the FDIC, or may pledge a pool of
government securities valued at least 105% of the total value of public monies on deposit at the
institution. The School District s policy is to deposit money with financial institutions that are able to
abide by the laws governing insurance and collateral of public funds.

As of June 30, the carrying amount of the School District s deposits was ($242,300). The School
District s bank balance was $172,236 and of the School District s deposits, 100% was insured by the
FDIC.

B. Investments:

As of June 30, the School District had the following investments and maturities:

                                                                 Fair
                       Investment type                           Value          Maturity    Rating
        Repurchase agreements                                $   5,958,072       Daily      N/A (1)
                                                                                                  (2)
        STAROhio                                                       792        N/A      AAAm
                                                             $   5,958,864
        (1)
              Underlying securities are exempt.
        (2)
              Standard and Poor's rating

STAROhio is an investment pool managed by the State Treasurer s Office which allows governments
within the State to pool their funds for investment purposes. STAROhio is not registered with the
Securities Exchange Commission as an investment company, but does operate in a manner consistent with
Rule 2a7 of the Investment Company Act of 1940. Investments in STAROhio are valued at STAROhio s
share price which is the price the investment could be sold for on June 30, 2006.

Following Ohio statutes, the Board of Education has, by resolution, specified the funds to receive an
allocation of interest earnings. Interest revenue credited to the general fund during fiscal year 2006
amounted to $166,715, which includes $75,166 assigned from other School District funds.




                                                        31                                        (Continued)
                                   Crestwood Local School District
                                 Notes to the Basic Financial Statements
                                 For the fiscal year ended June 30, 2006


Custodial credit risk for an investment is the risk that in the event of failure of the counterparty, the
School District will not be able to recover the value of its investments or collateral securities that are in
the possession of an outside party. The School District s $5,958,072 investment in repurchase
agreements is to be secured by the specific government securities upon which the repurchase agreements
are based. These securities, held by the counterparty and not in the School District s name, must be
obligations of or guaranteed by the United States and mature or be redeemable within five years of the
date of the related repurchase agreement. The School District s policy is to invest money with financial
institutions that are able to abide by the laws governing insurance and collateral of public funds.

Interest rate risk is the possibility that changes in interest rates will adversely affect the fair value of an
investment. The School District s investment policy does not address limits on investment maturities as a
means of managing its exposure to fair value losses arising from increasing interest rates.

Credit risk is the possibility that an issuer or other counterparty to an investment will not fulfill its
obligation. The School District s investment policy requires certain credit ratings for some investments
as allowed by state law.


NOTE 5 - PROPERTY TAXES

Property taxes are levied and assessed on a calendar year basis. Second half distributions occur in a new
fiscal year. Property taxes include amounts levied against all real, public utility and tangible personal
(used in business) property located within the School District. Real property taxes are levied after April 1
on the assessed value listed as of the prior January 1, the lien date. Public utility property taxes attached
as a lien on December 31 of the prior year were levied April 1 and are collected with real property taxes.
Assessed values for real property taxes are established by State law at 35% of appraised market value.
All property is required to be revalued every six years. The last revaluation was completed in 2001 for
the following tax year. Public utility property taxes are assessed on tangible personal property at 85% of
true value (with certain exceptions) and on real property at 35% of true value. Tangible personal property
taxes are levied after April 1 on the value listed as of December 31 of the current year. In prior years,
tangible personal property was assessed at 25% of true value for capital assets and twenty-three percent of
true value for inventory. The tangible personal property tax is being phased out the assessment
percentage for all property including inventory for 2006 is 18.75%. This will be reduced to 12.5% for
2007, 6.25% for 2008 and zero for 2009.

Real property taxes are payable annually or semi-annually. If paid annually, payment is due December
31; if paid semi-annually, the first payment is due December 31 with the remainder payable by June 20.
Under certain circumstances, state statute permits earlier or later payment dates to be established.

Tangible personal property taxes paid by multi-county taxpayers are due September 20. Single county
taxpayers may pay annually or semi-annually. If paid annually, payment is due April 30; if paid semi-
annually, the first payment is due April 30, with the remainder payable by September 20.




                                                      32
                                  Crestwood Local School District
                                Notes to the Basic Financial Statements
                                For the fiscal year ended June 30, 2006


The School District receives property taxes from Portage County. The County Auditor periodically
advances to the School District its portion of the taxes collected. Second-half real property tax payments
collected by the County by year-end are available to finance current fiscal year operations. The amount
available to be advanced can vary based on the date the tax bills are sent and on the collection of
delinquent taxes. The Board has passed a resolution to accept advances of property taxes and make them
available for appropriation.

Accrued property taxes receivable represents delinquent taxes outstanding and real property, personal
property and public utility taxes which became measurable as of year end. Although total property tax
collections for the next fiscal year are measurable, only the amount available as an advance at June 30 is
intended to finance current year operations. The receivable is therefore offset by a credit to deferred
revenue for that portion not intended to finance current year operations. The amounts available as
advances at June 30 was $343,663 in the general fund, $7,301 in the classroom facility maintenance
special revenue fund, $39,074 in the bond retirement debt service fund, and $23,325 in the permanent
improvement capital projects fund, and are recognized as revenue on the fund financial statements.

The assessed values upon which the current fiscal year taxes were collected are:

                                                            2004                  2005
                        Property Category              Assessed Value        Assessed Value

                Real Property
                 Residential and Agricultural      $       237,786,150   $       242,955,170
                 Commercial and Industrial                  17,972,100            20,904,750
                 Public Utilities                                5,980                 6,010

                Tangible Personal Property
                  General                                   15,216,196            10,935,395
                  Public Utilities                          11,495,990            10,465,100
                   Total                           $       282,476,416   $       285,266,425




                                                   33                                          (Continued)
                                  Crestwood Local School District
                                Notes to the Basic Financial Statements
                                For the fiscal year ended June 30, 2006


NOTE 6 - RECEIVABLES

Receivables at year-end consisted of taxes, accounts, intergovernmental grants and entitlements and
interfund. All receivables are considered collectible in full due to the ability to foreclose for the
nonpayment of taxes, the stable condition of State programs, and the current year guarantee of federal
funds. The general fund accounts receivable at year-end consisted of tuition and miscellaneous
reimbursements of $572,115.

A summary of the principal items of intergovernmental receivables follows:

                        Governmental activities                       Amount
                        Special revenue funds:
                          Food service                                   21,116
                          Title VI-B                                    117,980
                          Title I                                        17,043
                          Title VI                                        1,195
                          Drug-free school                                1,859
                          Improving teacher quality                       6,843
                          Miscellaneous                                   1,618
                           Total intergovernmental receivable     $     167,654




                                                     34
                                       Crestwood Local School District
                                     Notes to the Basic Financial Statements
                                     For the fiscal year ended June 30, 2006


NOTE 7 - CAPITAL ASSETS

Capital asset activity for the fiscal year ended June 30, 2006, was as follows:


                                                  Balance                                                 Balance
Governmental Activities                         July 1, 2005         Increases          Decreases       June 30, 2006

Capital assets, not being depreciated:
 Land                                       $      1,548,490     $        1,990     $             -     $    1,550,480
 Construction in progress                         19,599,231            337,276              (6,622)        19,929,885
Total capital assets, not being
 depreciated                                      21,147,721            339,266              (6,622)        21,480,365

Capital assets, being depreciated:
 Land improvements                                          -            34,770                     -           34,770
 Buildings                                          4,784,835                 -                     -        4,784,835
 Furniture and equipment                            3,091,467            74,443                     -        3,165,910
 Vehicles                                           2,560,999                 -                     -        2,560,999
Total capital assets, being
 depreciated                                      10,437,301            109,213                     -       10,546,514

Less: Accumulated depreciation
 Land improvements                                          -               (695)                   -             (695)
 Buildings                                         (3,220,791)           (78,591)                   -       (3,299,382)
 Furniture and equipment                           (1,648,128)          (160,509)                   -       (1,808,637)
 Vehicles                                          (1,538,122)          (193,589)                   -       (1,731,711)
Total accumulated depreciation                     (6,407,041)          (433,384)                   -       (6,840,425)

Total capital assets being
 depreciated, net                                   4,030,260           (324,171)                   -        3,706,089

Governmental activities capital
 assets, net                                $     25,177,981     $       15,095     $        (6,622)    $   25,186,454




                                                           35                                                (Continued)
                                   Crestwood Local School District
                                 Notes to the Basic Financial Statements
                                 For the fiscal year ended June 30, 2006


Depreciation expense was charged to governmental functions as follows:

                     Instruction:
                      Regular                                        $        132,553
                      Special                                                   3,667
                      Vocational                                                7,693
                     Support services:
                      Pupils                                                    3,499
                      Instructional staff                                      27,739
                      Administration                                           25,921
                      Fiscal                                                    1,290
                      Operation and maintenance of plant                       14,577
                      Pupil transportation                                    197,505
                     Community servcies                                           587
                     Food service operations                                    3,295
                     Extracurricular activities                                15,058
                                                                     $        433,384



NOTE 8 - INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS

Interfund balances at June 30, 2006 consisted of the following:

                      Due to general fund from:
                        Nonmajor governmental funds                      $   56,863
                        Fiduciary funds                                      16,900
                      Total due to general fund from other funds         $   73,763

All balances resulted from the time lag between the dates that (1) interfund goods and services are
provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, or
(3) payments between funds are made. As of June 30, 2006, all interfund loans outstanding are
anticipated to be repaid in fiscal year 2007.

Interfund transfers for the year ended June 30, 2006 consisted of the following:

                      Transfers from general fund to:
                        Nonmajor governmental funds                      $     6,901




                                                        36
                                   Crestwood Local School District
                                 Notes to the Basic Financial Statements
                                 For the fiscal year ended June 30, 2006


Transfers are used to (1) move revenues from the fund that statue or budget requires to collect them to the
fund that statue or budget requires to expend them, (2) move receipts restricted to debt service from the
fund collecting the receipts to the debt service fund as debt service payments become due, and (3) use
unrestricted revenues collected in the general fund to finance various programs accounted for in other
funds in accordance with budgetary authorizations.


NOTE 9 - RISK MANAGEMENT

The School District is exposed to various risks of loss related to torts, theft of, damage to, and destruction
of assets, errors and omissions, injuries to employees and natural disasters. These risks are covered by
commercial insurance purchased from independent third parties. There have been no settlements paid in
excess of insurance nor has insurance coverage been significantly reduced in the past four years.

A. Property and liability

The School District has joined the Portage County School Consortium (the Consortium) for health
insurance for the School District's employees. The Consortium was established in 1981 so that thirteen
educational-service providers in Portage County could manage risk exposures and purchase necessary
insurance coverages as a group. The Consortium is organized into two distinct entities to facilitate its risk
management operations. The Property and Casualty Insurance Pool functions to manage the member
districts' physical property and liability risks. The Health and Welfare Trust is to facilitate the
management of risks associated with providing employee benefits, coverages such as health and accident
insurance, disability insurance and life insurance. The School District participates in the Health and
Welfare Trust. The Consortium retains a third-party administrator to facilitate the operation of the Health
and Welfare Trust.

The School District pays all insurance premiums directly to the Consortium. Although the School
District does not participate in the day-to-day management of the Consortium, one of its administrators
serves as a trustee of the Consortium's governing board as provided in the consortium's enabling
authority. Although the School District recognizes that it retains a contingent liability to provide
insurance coverages should the assets of the Consortium become depleted, it is the opinion of
management that the assets of the Consortium are sufficient to meet its claims.

In addition, the School District contracted with Indiana Insurance for property, Nationwide Agribusiness
for employee bonding, and Ohio School Plan for general liability insurance during fiscal year 2006.

B. Workers Compensation

The School District is a member of the OSBA Workers Compensation Group Rating Program
established in April 1991. The program was created by the Ohio School Boards Association as a result of
the Worker s Compensation group rating plan as defined in Section 4123.29 of the Ohio Revised Code.
The group rating program allows school districts to group together to potentially achieve a lower
premium rate than they may otherwise be able to acquire as individual employers.

The School District pays the State Workers' Compensation System a premium based on a rate per $100 of
salaries. This rate is calculated based on accident history and administrative costs.




                                                     37                                           (Continued)
                                  Crestwood Local School District
                                Notes to the Basic Financial Statements
                                For the fiscal year ended June 30, 2006


NOTE 10 - DEFINED BENEFIT PENSION PLANS

A. School Employees Retirement System

The School District contributes to the School Employees Retirement System of Ohio (SERS), a cost-
sharing multiple-employer public employee retirement system administered by the School Employees
Retirement Board. SERS provides basic retirement benefits, annual cost-of-living adjustments, disability,
survivor, and health care benefits based on eligible service credit to members and beneficiaries. Benefits
are established by Chapter 3309 of the Ohio Revised Code. SERS issues a publicly available, stand alone
financial report that includes financial statements and required supplementary information for SERS. The
report may be obtained by writing to the School Employees Retirement System, 300 East Broad Street,
Columbus, Ohio 43215-3746 or by calling toll free (800) 878-5853. It is also posted on SERS website,
www.ohsers.org, under forms and publications.

Plan members are required to contribute 10% of their annual covered salary and the School District is
required to contribute at an actuarially determined rate. The current rate is 14% of annual covered
payroll. A portion of the School s contribution is used to fund pension obligations with the remainder
being used to fund health care benefits; for fiscal year 2006, 10.58% of annual covered salary was the
portion used to fund pension obligations. For the fiscal year 2005, 10.57% was used to fund pension
obligations. The contribution requirements of plan members and employers are established and may be
amended, up to a statutory maximum amount, by the SERS Retirement Board. The School District s
required contributions for pension obligations to SERS for the fiscal years ended June 30, 2006, 2005,
and 2004 were $352,423, $379,451 and $309,117, respectively; 40% has been contributed for fiscal year
2006 and 100% for the fiscal years 2005 and 2004. $209,977, representing the unpaid contribution for
fiscal year 2006, is recorded as an intergovernmental payable.

B. State Teachers Retirement System

The School District contributes to the State Teachers Retirement System of Ohio (STRS), a cost-sharing
multiple-employer public employee retirement system. STRS provides retirement and disability benefits,
annual cost-of-living adjustments, disability, and death and survivor benefits to members and
beneficiaries. Benefits are established by Chapter 3307 of the Ohio Revised Code. STRS issues a
publicly available, stand alone financial report that includes financial statements and required
supplementary information for STRS. The report may be obtained by writing to the State Teachers -
Retirement System, 275 East Broad Street, Columbus, Ohio 43215-3371, by calling (614) 227 - 4090, or
by visiting the STRS Ohio Web site at www.strsoh.org.

New members have a choice of three retirement plans, a Defined Benefit (DB) Plan, a Defined
Contribution (DC) Plan and a Combined Plan. The DB plan offers an annual retirement allowance based
on final average salary times a percentage that varies based on years of service, or an allowance based on
member contributions and earned interest matched by STRS Ohio funds times an actuarially determined
annuity factor.

The DC Plan allows members to place all their member contributions and employer contributions equal to
10.5% of earned compensation into an investment account. Investment decisions are made by the
member. A member is eligible to receive a retirement benefit at age 50 and termination of employment.




                                                   38
                                  Crestwood Local School District
                                Notes to the Basic Financial Statements
                                For the fiscal year ended June 30, 2006


The Combined Plan offers features of both the DC Plan and the DB Plan. In the Combined Plan, member
contributions are invested by the member, and employer contributions are used to fund the defined benefit
payment at a reduced level from the regular DB Plan.

DC and Combined Plan members will transfer to the Defined Benefit Plan during their fifth year of
membership unless they permanently select the DC or Combined Plan. Existing members with less than
five years of service credit as of June 30, 2001, were given the option of making a one time irrevocable
decision to transfer their account balances from the existing DB Plan into the DC Plan or the Combined
Plan. This option expired on December 31, 2001.

A DB or Combined Plan member with five or more years credited service who becomes disabled may
qualify for a disability benefit. Eligible spouses and dependents of these active members who die before
retirement may qualify for survivor benefits. Members in the DC Plan who became disabled are entitled
only to their account balance. If a member dies before retirement benefits begin, the member s
designated beneficiary is entitled to receive the member s account balance.

For the fiscal year ended June 30, 2006 plan members were required to contribute 10% of their annual
covered salaries. The School District was required to contribute 14%; 13% was the portion used to fund
pension obligations. Contribution rates are established by STRS, upon recommendation of its consulting
actuary, not to exceed statutory maximum rates of 10% for members and 14% for employers. Chapter
3307 of the Ohio Revised Code provides statutory authority for member and employer contributions.

The School District s required contributions for pension obligations to the DB plan for the fiscal years
ended June 30, 2006, 2005, and 2004 were $1,257,375, $1,328,422 and $1,245,927, respectively; 48%
has been contributed for fiscal year 2006 and 100% for the fiscal years 2005 and 2004. $654,112,
representing the unpaid contribution for fiscal year 2006, is recorded as an intergovernmental payable.
Contributions to the DC and Combined plans for fiscal year 2006 were $9,558 made by the School
District and $16,212 made by the plan members.


NOTE 11 - POSTEMPLOYMENT BENEFITS

Comprehensive health care benefits are provided to retired teachers and their dependents through the
State Teachers Retirement System (STRS). Benefits include hospitalization, physicians' fees, prescription
drugs and reimbursement of monthly Medicare premiums. All benefit recipients and sponsored
dependents are eligible for health care coverage. Benefit provisions and the obligations to contribute are
established by the STRS based on authority granted by State statute. Most benefit recipients are required
to pay a portion of the health care cost in the form of a monthly premium. Health care benefits are
financed on a pay-as-you-go basis.




                                                   39                                         (Continued)
                                   Crestwood Local School District
                                 Notes to the Basic Financial Statements
                                 For the fiscal year ended June 30, 2006


By Ohio law, the cost of coverage paid from STRS funds shall be included in the employer contribution
rate, currently 14% of covered payroll. The retirement board currently allocates employer contributions
equal to 1% of covered payroll to the Health Care Reserve Fund from which payments for health care
benefits are paid. For the School District this amount equaled $96,721 during the 2006 fiscal year. The
balance in the Health Care Stabilization Fund for the STRS was $3.3 billion at June 30, 2005 (latest
information available). For the year ended June 30, 2006, the net health care costs paid by the STRS
were $282,743,000 and eligible benefit recipients totaled 119,184.

For the School Employees Retirement System (SERS), coverage is made available to service retirees with
ten or more years of qualifying service credit, disability and survivor benefit recipients. Effective January
1, 2004, all retirees and beneficiaries are required to pay a portion of their health care premium. The
portion is based on years of service, Medicare eligibility and retirement status. For this fiscal year,
employer contributions to fund health care benefits were 3.42% of covered payroll.

In addition, SERS levies a surcharge to fund health care benefits equal to 14% of the difference between a
minimum pay and the member's pay, pro-rated for partial service credit. For fiscal year 2006, the
minimum pay has been established at $35,800. The surcharge, added to the unallocated portion of the
14% contribution rate, provides for maintenance of the asset target level for the health care fund. For the
School District, the amount of employer contributions used to fund health care equaled $158,601, which
includes a surcharge of $44,680 during the 2006 fiscal year.

Health care benefits are financed on a pay-as-you-go basis. Net health care costs for the year ending June
30, 2006 were $158,751,207. The target level for the health fund is 150% of projected claims less
premium contributions for the next fiscal year. As of June 30, 2006, the value of the health care fund was
$295.6 million, which is about 221% of next year s projected net health care costs. On the basis of
actuarial projections, the allocated contributions will be insufficient, in the long term, to provide for a
health care reserve equal to at least 150% of estimated annual claim costs. The number of participants
eligible to receive benefits is 59,492.


NOTE 12 - CAPITALIZED LEASES - LESSEE DISCLOSURE

The School District, in prior years, has entered into capitalized leases for the acquisition of copiers. Each
lease meets the criteria of a capital lease as defined by Statement of Financial Accounting Standards No.
13 "Accounting for Leases", which defines a capital lease generally as one which transfers benefits and
risks of ownership to the lessee. Capital lease payments have been reclassified and are reflected as debt
service expenditures in the fund financial statements of governmental funds. These expenditures are
reflected as program/function expenditures on a budgetary basis.

Capital assets acquired by lease have been capitalized as equipment in the amount of $166,070 equal to
the present value of the future minimum lease payments in the government-wide financial statements.
Principal payments in the current fiscal year totaled $20,929.

The following is a schedule of the future minimum lease payments required under the capital leases and
the present value of the minimum lease payments at year-end.




                                                     40
                                      Crestwood Local School District
                                    Notes to the Basic Financial Statements
                                    For the fiscal year ended June 30, 2006


                                             Fiscal                             Lease
                                             Year                              Payments

                                              2007                                 20,485
                                              2008                                    693
                                 Total minimum lease payments                      21,178
                               Less: amount representing interest                  (1,051)
                            Present value of minimum lease payments        $       20,127




NOTE 13 - LONG-TERM OBLIGATIONS

Changes in long-term obligations of the School District during the fiscal year were as follows:

                                          Balance                                      Balance      Due Within
                                         July 1, 2005   Additions     Reductions      June 30, 2006 One Year
  Governmental Activities

  General Obligation Bonds
  2001 School Improvements, 5.00%
    Serial and term bonds              $ 7,250,110 $              - $ (295,000) $         6,955,110 $ 305,000
    Capital appreciation bonds             233,890                -          -              233,890         -
      Accretion on bonds                   148,309           48,643          -              196,952         -

  2001 Site Acquisition, 5.00%
    Serial and term bonds                    185,000              -       (5,000)           180,000     10,000
    Capital appreciation bonds                 5,000              -            -              5,000          -
      Accretion on bonds                       3,361          1,103            -              4,464          -
    Total bonds and notes payable          7,825,670         49,746     (300,000)         7,575,416    315,000

  Other Liabilities
  EPA Asbestos Removal loan                  55,211             -         (6,901)             48,310     6,901
  Compensated absences                      898,737       224,104       (219,844)            902,997    76,794
  Capital leases                             41,056             -        (20,929)             20,127    19,452
     Total other liabilities                995,004       224,104       (247,674)            971,434   103,147

  Governmental activities
   long-term liabilities               $ 8,820,674 $ 273,850 $ (547,674) $                8,546,850 $ 418,147




                                                        41                                             (Continued)
                                   Crestwood Local School District
                                 Notes to the Basic Financial Statements
                                 For the fiscal year ended June 30, 2006


In fiscal year 2001, the School District issued bonds for the site acquisition and construction of classroom
facilities in the amount of $210,000 and $8,474,000, respectively. Each of the bond issues will mature on
December 1, 2023. All bonds are general obligation bonds for which the full faith and credit of the
School District is pledged and will be paid from property taxes in the bond retirement debt service fund.
Both bond issues include serial, term and capital appreciation bonds. Current year additions amounted to
$49,746 which represents the accretion of discounted interest. The final amounts of the classroom
facilities and site acquisition capital appreciation bonds will be $695,000 and $15,000, respectively.

In fiscal year 1994, the School District obtained an EPA Asbestos loan in the amount of $124,221 in
order to undertake an asbestos abatement project. The EPA Asbestos loan will be paid from property
taxes, receipted into the general fund and subsequently transferred to the bond retirement debt service
fund, and will mature on May 1, 2013. Compensated absences will be paid from the fund from which the
person is paid. In prior years this has primarily been the general fund. Capital lease obligations will be
paid from the general fund.

Principal and interest requirements to retire the long-term debt obligations outstanding at June 30, 2006
are as follows:

                                                                  EPA Asbestos
                                      General Obligation Bonds    Removal Loan
            Fiscal Year Ending        Principal        Interest     Principal          Total
                   2007                   315,000         333,101         6,901           655,002
                   2008                   325,000         320,299         6,901           652,200
                   2009                   340,000         306,663         6,901           653,564
                   2010                   126,600         528,007         6,901           661,508
                   2011                   112,290         542,317         6,901           661,509
                2012-2016               1,940,000       1,284,624        13,805         3,238,429
                2017-2021               2,440,000         759,318             -         3,199,318
                2022-2024               1,775,110         135,875             -         1,910,985
                   Total            $   7,374,000 $ 4,210,204 $          48,310 $      11,632,514



NOTE 14 - JOINTLY GOVERNED ORGANIZATIONS

Stark Portage Area Computer Consortium (SPARCC) is the computer service organization or Data
Acquisition Site (DAS) used by the School District. SPARCC is an association of public school districts in a
geographic area determined by the Ohio Department of Education. The Stark County Educational Service
Center acts as the fiscal agent for the consortium. The purpose of the consortium is to develop and employ a
computer system efficiently and effectively for the needs of the member Boards of Education. All school
districts in the consortium are required to pay fees, charges, and assessments as charged. A board made up of
superintendents from all of the participating school districts governs SPARCC. An elected Executive Board
consisting of five members of the governing board is the managerial body of the consortium and meets on a
monthly basis. The School District does not maintain an ongoing financial interest or an ongoing financial
responsibility. Payments to SPARCC are made from the general fund. During the fiscal year, the School
District contributed $51,411 to SPARCC.

The Portage County School Consortium is an insurance group-purchasing consortium made up of thirteen
school districts in Portage County. All member districts pay an insurance premium directly to the consortium.


                                                     42
                                    Crestwood Local School District
                                  Notes to the Basic Financial Statements
                                  For the fiscal year ended June 30, 2006


The School District paid $2,695,502 in the form of health care premiums to the consortium for the current
fiscal year.

The Maplewood Career Center is located in Portage County and offers vocational training to Crestwood
students in the 11th and 12th grades. Although the School District is represented on the Board of
Education of the Career Center by appointing a member to a 3-year term, any financial support of the
Career Center is generated directly by them through a countywide tax levy and state-supported pupil basic
aid. The School District does not maintain an ongoing financial interest or an ongoing financial
responsibility.


NOTE 15 - CONTINGENCIES

A. Grants

The School District received financial assistance from federal and state agencies in the form of grants.
The expenditure of funds received under these programs generally requires compliance with terms and a
condition specified in the grant agreements, and is subject to audit by the grantor agencies. Any
disallowed claims resulting from such audits could become a liability of the general fund or other
applicable funds. However, in the opinion of management, any such disallowed claims will not have a
material adverse effect on the overall financial position of the School District at year-end.

B. Litigation

There are currently no matters in litigation with the School District as defendant.


NOTE 16 - STATUTORY RESERVES

The School District is required by State statute to annually set aside monies for the purchase of textbooks
and other instructional materials, and for capital improvements. The amounts set-aside may be reduced
by offset credits, which are monies received and restricted for the same specific purpose. Although the
School District had offsets and qualifying disbursements during the year that reduced set-aside amounts
below zero, these extra amounts may only be used to reduce the set-aside requirements of future years for
the purchase of textbooks and/or instructional materials. Negative amounts are therefore not presented as
being carried forward to the next fiscal year for the other set-asides. Amounts not spent by year-end or
reduced by offset credits must be held in cash at year-end and carried forward to be used for the same
purposes in future years.
                                                                               Capital
                                                                  Textbook   Maintenance
                                                                  Reserve     Reserve
                   Set-aside cash balance
                     as of June 30, 2005                      $            - $          -
                   Current year set-aside requirement                399,026      399,026
                   Current year offset                                     -     (450,450)
                   Qualifying disbursements                         (269,527)           -
                   Total                                      $      129,499 $    (51,424)




                                                        43                                     (Continued)
                                   Crestwood Local School District
                                 Notes to the Basic Financial Statements
                                 For the fiscal year ended June 30, 2006



During fiscal year 2006, $10,647 was received as a school bus subsidy. This activity resulted in a reserve
balance of $20,225 to be used for the purchase of school buses in future years, and is reported as
restricted cash on the governmental funds balance sheet.


NOTE 17 - ACCOUNTABILITY

As of June 30, 2006, five funds had a deficit fund balance. This deficit was caused by the application of
GAAP. The general fund provides transfers to other funds to cover deficit balances in those funds;
however, this is done when cash is needed rather than when accruals occur. The following funds had
deficit balances:

                           Fund                              Amount
                           Special revenue funds:
                             Food service                $      56,422
                            IDEA, Part B                         9,655
                           Title I                                 913
                           Title V                                  44
                           Drug-free school grant                1,937


NOTE 18 - COMMITMENTS

The School District has entered into contracts for the planning and construction of classroom facilities. As
of June 30, 2006 the School District is committed to contracts for these projects in the amount of $336,589
and has expended $17,469,328 to date. These projects are commitments of the Classroom Facilities capital
projects fund.


NOTE 19 - REQUIRED SUPLEMENTARY INFORMATION (RSI) IS OMITTED

For the fiscal year ended 2005, the School District was required to implement GASB Technical Bulletin
No. 2004-2. In addition to the implementation of this guidance, the School District simultaneously
implemented GASB Statement No. 45, as recommended by the GASB. This Statement requires
employers to present as required supplementary information (RSI) schedules of funding progress and
employer contributions for the plan as a whole if a plan financial report, prepared in accordance with
GASB Statement 43 is not issued and made publicly available and the plan is not included in the financial
report of a public employee retirement system or another entity. SERS and STRS have not issued a
financial report in accordance with the statement and have not conducted a valuation of their plans, as
they were not required to implement the statement as of the date of this report. Therefore, RSI is
unavailable to the School District and it does not follow these notes to the basic financial statements.




                                                    44
                                  Crestwood Local School District
                                Notes to the Basic Financial Statements
                                For the fiscal year ended June 30, 2006


NOTE 20     CHANGE IN ACCOUNTING PRINCIPLES

For the fiscal year ended 2006, the School District implemented GASB Statement No. 42, Accounting
and Financial Reporting Impairment of Capital Assets and for Insurance Recoveries , GASB Statement
No 46, Net Assets Restricted by Enabling Legislation and GASB Statement No. 47, Accounting for
Termination Benefits.

GASB Statement No. 42 establishes accounting and financial reporting standards for impairment of
capital assets. A capital asset is considered impaired when its service utility has declined significantly
and unexpectedly. This statement also clarifies and establishes accounting requirements for insurance
recoveries. GASB Statement No 46 is an amendment of GASB Statement No. 34 and GASB Statement
No. 47 establishes standards of accounting and financial reporting for termination benefits. The
implementation of GASB Statements did not materially affect the presentation of the financial statements
of the School District.




                                                   45
    Crestwood
Local School District
          ****

     Report Letters

     June 30, 2006
                                  CRESTWOOD LOCAL SCHOOL DISTRICT

                                                 TABLE OF CONTENTS



                                                                                                                  PAGE


Independent Auditor’s Report on Internal Control Over Financial Reporting
    and on Compliance and Other Matters Based on Audit of Financial Statements
   Performed in Accordance With Government Auditing Standards……………………                                                1-2

Report on Compliance With Requirements Applicable to Each Major Program
   and Internal Control Over Compliance in Accordance with OMB Circular A-133 .......                                3-4

Schedule of Expenditures of Federal Awards ...................................................................           5

Schedule of Findings and Questioned Costs .....................................................................          6
                                                                              January 26, 2007

To the Board of Education
Crestwood Local School District
Portage County, Ohio

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL
   REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
  AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
                 GOVERNMENT AUDITING STANDARDS


We have audited the accompanying financial statements of the governmental activities, each
major fund, and the aggregate remaining fund information of Crestwood Local School District as
of and for the year ended June 30, 2006, which collectively comprise the School District’s basic
financial statements, and have issued our report thereon dated January 26, 2007. We conducted
our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting
In planning and performing our audit, we considered Crestwood Local School's internal control
over financial reporting in order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and not to provide assurance on the internal
control over financial reporting. Our consideration of the internal control over financial reporting
would not necessarily disclose all matters in the internal control over financial reporting that
might be material weaknesses. A material weakness is a reportable condition in which the design
or operation of one or more of the internal control components does not reduce to a relatively low
level the risk that misstatements caused by error or fraud in amounts that would be material in
relation to the financial statements being audited may occur and not be detected within a timely
period by employees in the normal course of performing their assigned functions. We noted no
matters involving the internal control over financial reporting and its operation that we consider
to be material weaknesses.




                                                 1
Crestwood Local Schools, Portage County, Ohio
Internal Control-Compliance Report
Page 2

Compliance and Other Matters
As part of obtaining reasonable assurance about whether Crestwood Local School District’s
financial statements are free of material misstatement, we performed tests of its compliance with
certain provisions of laws, regulations, contracts and grant agreements, noncompliance with
which could have a direct and material effect on the determination of financial statement
amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit and, accordingly, we do not express such an opinion. The results of our
tests disclosed no instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards.

This report is intended solely for the information and use of by the Board of Education,
management, federal awarding agencies, and pass through agencies, and is not intended to be and
should not be used by anyone other than those specified parties.




                                               2
                                                                       January 26, 2007
To the Board of Education
Crestwood Local School District
Portage County, Ohio

 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS
    APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL
       OVER COMPLIANCE IN ACCORDANCE OMB CIRCULAR A-133


Compliance
We have audited the compliance of Crestwood Local Schools with the types of compliance
requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133,
Compliance Supplement that are applicable to the School District’s major program for the year
ended June 30, 2006. The School District’s major Federal program is identified in the summary
of auditor's results section of the accompanying schedule of findings and questioned costs.
Compliance with the requirements of laws, regulations, contracts and grants applicable to its
major federal program is the responsibility of Crestwood Local School District’s management.
Our responsibility is to express an opinion on Crestwood Local School's compliance based on our
audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted
in the United States of America; the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States; and the
OMB Circular A-133, Audits of States, Local Governments and Non-Profit Organizations. Those
standards and OMB Circular A-133 require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements
referred to above that could have a direct and material effect on the major federal program
occurred. An audit includes examining, on a test basis, evidence about Crestwood Local School's
compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion. Our audit does not provide a legal determination of Crestwood Local School's
compliance with those requirements.

In our opinion, Crestwood Local School District complied, in all material respects, with the
requirements referred to above that are applicable to its major program for the year ended June
30, 2006. The results of our auditing procedures disclosed no instances of noncompliance with
those requirements, which are required to be reported in accordance with OMB Circular A-133.




                                              3
Crestwood Local Schools
Report on OMB Circular A-133 Compliance-Internal Control
Page 2

Internal Control Over Compliance
The management of Crestwood Local School District is responsible for establishing and
maintaining effective internal control over compliance with the requirements of laws, regulations,
contracts and grants applicable to federal programs. In planning and performing our audit, we
considered Crestwood Local School District’s internal control over compliance with requirements
that could have a direct and material effect on its major program in order to determine our
auditing procedures for the purpose of expressing our opinion on compliance and to test and
report on the internal control over compliance in accordance with OMB Circular A-133.

Our consideration of the internal control over compliance would not necessarily disclose all
matters in the internal control that might be material weaknesses. A material weakness is a
reportable condition in which the design or operation of one or more of the internal control
components does not reduce to a relatively low level the risk that noncompliance with the
applicable requirements of laws, regulations, contracts and grants that would be material in
relation to a major federal program being audited may occur and not be detected within a timely
period by employees in the normal course of performing their assigned functions. We noted no
matters involving the internal control over compliance and its operation that we consider to be
material weaknesses.

Schedule of Expenditures of Federal Awards – Non GAAP Budgetary Basis

We have audited the financial statements of the governmental activities, each major fund and the
aggregate remaining fund information of the Crestwood Local Schools as of and for the year
ended June 30, 2006, which collectively comprise the School District’s basic financial statements,
and have issued our report thereon dated January 26, 2007. Our audit was performed for the
purpose of forming an opinion on the basic financial statements taken as a whole. The
accompanying schedule of expenditures of federal awards is presented for purposes of additional
analysis as required by OMB Circular A-133 and is not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in
relation to the basic financial statements taken as a whole.
This report is intended solely for the information and use of the Board of Education,
management, and the federal awarding agencies and pass through agencies and is not intended to
be and should not be used by anyone other than these specified parties.




                                                 4
                                       CRESTWOOD LOCAL SCHOOL DISTRICT
                            SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS - CASH BASIS
                                     FOR THE FISCAL YEAR ENDED JUNE 30, 2006


                         Federal Grantor/
                      Pass Through Grantor/                          CFDA                Grant             Federal            Federal         Non-Cash
                          Program Title                              Number             Number             Receipts        Disbursements     Expenditures

U. S. Department of Education
(Passed Through Ohio Department
of Education):

   Title I                                                             84.010      C1-S1-2005        $         12,332 $           17,118 $             0
   Title I                                                             84.010      C1-S1-2006                  93,825             93,508               0
   Title I                                                             84.010      C1-SD-2005                       0              5,649               0
   Title I                                                             84.010      C1-SD-2006                  51,163             51,163               0
      Total Title I                                                                                           157,319            167,437               0

   Special Education Cluster

   IDEA-B                                                              84.027      6B-SF-2005                  63,088             74,083               0
   IDEA-B                                                              84.027      6B-SF-2006                 460,771            459,069               0
     Total IDEA-B                                                                                             523,860            533,152               0

   Preschool Grants                                                    84.173      PG-S1-2006P                  7,980              7,980               0
   Preschool Grants                                                    84.173      PG-S1-2005P                  4,228              4,228               0
     Total Preschool Grants                                                                                    12,208             12,208               0

         Total Special Education Cluster                                                                      536,068            545,360               0

   Title IV-A Safe and Drug-Free Schools {C}                           84.186      DR-S1-2005                     (84)               710               0
   Title IV-A Safe and Drug-Free Schools                               84.186      DR-S1-2006                   9,650             10,898               0
      Total Safe and Drug-Free Schools and Communities                                                          9,566             11,608               0

   Title V Innov                                                       84.298      C2-S1-2005                      26                623               0
   Title V Innov                                                       84.298      C2-S1-2006                  11,199             10,510               0
      Total Title V                                                                                            11,226             11,133               0

    Title II-D Technology {C}                                          84.318      TJ-S1-2005                     (155)                0               0
    Title II-D Technology                                              84.318      TJ-S1-2006                      530                93               0
     Total Title II-D                                                                                              375                93               0

   Title I-G Advanced Placement                                        84.330      AV-TF-2004                         52               52              0
      Total Title I-G Advanced Placement                                                                              52               52              0

   Title II-A                                                          84.367      TR-S1-2005                   4,276             12,793               0
   Title II-A                                                          84.367      TR-S1-2006                  79,086             73,943               0
      Total Title II-A                                                                                         83,361             86,736               0

Total Department of Education                                                                                 797,967            822,419               0

U. S. Department of Health and Human
Services (Passed Through Ohio Department
of Mental Retardation and Developmental
Disabilities):

  Community Alternative Funding System                                 93.778                                  98,528             98,528               0
  State Children's Health Insurance Program                            93.767                                   3,590              3,590               0

Total Department of Health and Human Services                                                                 102,118            102,118               0

U. S. Department of Agriculture
(Passed Through Ohio Department
of Education):

   Food Distribution Program (A) (B)                                   10.550                                  79,325                             79,325

Nutrition Cluster:
  National School Lunch Program (B)                                    10.555                                 119,004            119,004               0
         Total Nutrition Cluster                                                                              119,004            119,004               0

Total Department of Agriculture                                                                               198,329            119,004          79,325


Total Federal Assistance                                                                             $      1,098,414 $        1,043,541 $        79,325

   (A) Government commodities are reported at the fair market value of the commodities received and disbursed.
   (B) Federal money commingled with state subsidy reimbursements. It is assumed federal moneys are expended first.
   {C} Refunded Receipt



                                                                                        5
                                 CRESTWOOD LOCAL SCHOOL DISTRICT
                             SCHEDULE OF FINDINGS AND QUESTIONED COSTS
                                   OMB CIRCULAR A-133 , Section .505
                                            JUNE 30, 2006

                                  1. SUMMARY OF AUDITOR'S RESULTS

(d) (1) (i)       Type of Financial Statement                        Unqualified
                  Opinion
(d) (1) (ii)      Were there any material control weakness           No
                  conditions reported at the financial statement
                  level (GAGAS)?
(d) (1) (ii)      Were there any other reportable control weakness   No
                  conditions reported at the financial statement
                  level (GAGAS)?
(d) (1) (iii)     Was there any reported material non-               No
                  compliance at the financial statement
                  level (GAGAS)?
(d) (1) (iv)      Were there any material internal control           No
                  weakness conditions reported for major
                  federal programs?
(d) (1) (iv)      Were there any other reportable internal           No
                  control weakness conditions reported for
                  major federal programs?
(d) (1) (v)       Type of Major Programs'                            Unqualified
                  Compliance Opinion
(d) (1) (vi)      Are there any reportable findings under            No
                  Section .510?
(d) (1) (vii)     Major Programs (list):                             Special Education Cluster #84.027 & 84.173


(d) (1) (viii)    Dollar Threshold: Type A/B                         Type A: > $300,000
                  Programs                                           Type B: All others
(d) (1) (ix)      Low Risk Auditee?                                  Yes


      2. FINDINGS RELATED TO THE FINANCIAL STATEMENTS REQUIRED TO BE
       REPORTED IN ACCORDANCE WITH GAGAS

                 None noted.



                 3. FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDS

                 None noted.

                                                              6
                             CRESTWOOD LOCAL SCHOOL DISTRICT

                                         PORTAGE COUNTY




                                     CLERK’S CERTIFICATION
This is a true and correct copy of the report which is required to be filed in the Office of the
Auditor of State pursuant to Section 117.26, Revised Code, and which is filed in Columbus, Ohio.




CLERK OF THE BUREAU

CERTIFIED
MAY 10, 2007




                         88 E. Broad St. / Fourth Floor / Columbus, OH 43215 3506
                   Telephone: (614) 466 4514       (800) 282 0370    Fax: (614) 466 4490
                                           www.auditor.state.oh.us

								
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